Correlation Between NYSE Composite and Fidelity Zero
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Fidelity Zero at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NYSE Composite and Fidelity Zero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Fidelity Zero Total, you can compare the effects of market volatilities on NYSE Composite and Fidelity Zero and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NYSE Composite with a short position of Fidelity Zero. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidelity Zero.
Diversification Opportunities for NYSE Composite and Fidelity Zero
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and FIDELITY is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Fidelity Zero Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Zero Total and NYSE Composite is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NYSE Composite are associated (or correlated) with Fidelity Zero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Zero Total has no effect on the direction of NYSE Composite i.e., NYSE Composite and Fidelity Zero go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidelity Zero
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.02 times less return on investment than Fidelity Zero. But when comparing it to its historical volatility, NYSE Composite is 1.36 times less risky than Fidelity Zero. It trades about 0.24 of its potential returns per unit of risk. Fidelity Zero Total is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,031 in Fidelity Zero Total on August 28, 2024 and sell it today you would earn a total of 70.00 from holding Fidelity Zero Total or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Fidelity Zero Total
Performance |
| Timeline |
NYSE Composite and Fidelity Zero Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Zero Total
Pair trading matchups for Fidelity Zero
Pair Trading with NYSE Composite and Fidelity Zero
The main advantage of trading using opposite NYSE Composite and Fidelity Zero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Fidelity Zero can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fidelity Zero will offset losses from the drop in Fidelity Zero's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Fidelity Zero vs. Fidelity Extended Market | Fidelity Zero vs. Fidelity Small Cap | Fidelity Zero vs. Fidelity Nasdaq Posite |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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